Parliament has passed an act concerning temporary financial assistance with electricity costs. The purpose of the assistance is to help low-income households pay their electricity bills at a time of sharply rising electricity prices.
An Act of Parliament on temporary assistance with electricity costs will come into force on 1 January 2023. The assistance is intended for households that are unable to take full advantage of the tax credit for electricity due to their low annual income.
The tax credit is the primary form of help with electricity costs. The tax credit and the assistance with electricity costs are mutually exclusive, which means that households can only get one or the other. Receiving even a small amount of assistance with electricity costs disqualifies the recipient for the tax credit.
The tax credit and the assistance both cover electricity costs, that is to say electricity, value-added tax and basic charges. They are not available for electricity transmission costs or any late-payment penalties.
Electric bill must be at least EUR 400 per month to qualify
The application period for the assistance with electricity costs begins in January 2023. The application form will become available on 7 January 2023. Applications must be accompanied by an electricity bill.
The assistance is for electricity costs incurred between 1 January and 30 April 2023. It is available for one home that the recipient is using as their permanent residence. The home must be located in Finland.
There is an own-liability threshold of EUR 400 per month. The assistance covers 60% of the electricity costs exceeding the own-liability threshold. The maximum amount of assistance is EUR 660 per month. Applicants can qualify for the maximum amount if their electricity expenses come to at least EUR 1,500 per month. The minimum amount payable under the law is EUR 5 per month.
The assistance with electricity costs is not taxed and does not affect any other Kela benefits which customers may receive. However, customers who have been granted social assistance for an electric bill generally cannot get assistance under the new programme for that particular bill.
Eligibility for the tax credit for electricity must be checked first
Assistance with electricity costs from Kela is available only to those cannot take advantage of the full tax credit for electricity costs.
Those with electricity expenses exceeding EUR 2,000 in the period 1 January to 30 April 2023 may be be eligible for the tax credit. The tax credit is equal to 60% of electricity costs exceeding EUR 2,000. The maximum amount of tax credit for electricity for the year 2023 is EUR 2,400.
If, for example, a household’s total electricity expenses in the period January to April amount to EUR 4,000, the household will be able to claim 60% of the amount exceeding EUR 2,000, i.e. EUR 1,200, as tax credit. If the household’s total income tax bill for 2023 is less than EUR 1,200, leaving the household unable to apply for full tax credit, the household will qualify for assistance with electricity costs.
You can use the tax percentage calculator on the Tax Administration website to estimate your accrued taxes.
It can be difficult to predict your income taxes for the whole of 2023 and your electricity expenses for the period January to April. However, you have until the end of 2023 to apply for the assistance. It is a good idea to keep your electric bills for January to April because the bill must be included with the application for assistance with electricity costs.
Additional information for customers
- Temporary assistance with electricity costs (kela.fi)
- Tax credit for electricity (vero.fi)
- Tax percentage calculator (vero.fi)
- Tips for saving electricity (www.astettaalemmas.fi/en)